COMPETITIVE FORCEOF POTENTIAL ENTRY

New entrants boost competitive pressures
- By bringing new production capacity into play
- Through actions to build market share
Seriousness of threat of entry depends on
- BARRIERS to entry
- Expected REACTION of existing firms to entry
Barriers to entry exist WHEN
- It is difficult for newcomers to enter market
- A new entrant’s small sales volume puts it a price/cost disadvantage

COMPETITIVE FORCE OF POTENTIAL ENTRY